KARACHI (January 02 2003) : The State Bank of Pakistan on Wednesday authorised the commercial banks to set up subsidiaries for Islamic banking and announced certain critical measures for the promotion of Islamic banking in the country.
The central bank had already allowed the establishment of full-fledged Islamic banks in the private sector.
A full-service Islamic bank is already operational and providing Shariah-compliant products and services in Pakistan.
The SBP has also allowed stand-alone branches for Islamic banking in the existing commercial banks.
As the banks already have a large network of branches in the country, these decisions of the SBP will result in dedication of some of their branches exclusively for Islamic banking.
By the end of 2001, the SBP had issued detailed criteria for setting up of scheduled Islamic commercial banks based on Shariah principles in the private sector.
A detailed criteria for setting up of subsidiaries for Islamic banking by existing commercial banks, as well as the eligibility criteria, licensing requirements and other guidelines for opening of stand-alone branches of commercial bank for conducting Islamic banking have been notified.